It’s probably safe to assume that Greece’s current government has
enough on its plate to keep it occupied at the moment, but the impact of
its current economic crisis on the energy sector is worth noting. As Bloomberg noted today, renewable stocks have plummeted this week,
dragged down by, among other things, concern about a possible Greek
default.
While Greece’s precarious financial standing is nothing new, the
country now appears to be at a turning point for its economic future,
with a default or possible exit from the euro economy a very real
possibility. Banks have been closed, capital controls put in place and a
referendum on the further austerity scheduled for July 5. However, beyond an effect on stock prices, the potential of a Greek
default and further distance between Athens and the European community
could have a significant effect on the country- and region’s – energy
First and foremost, a default could have a deeply negative effect on
foreign investor confidence for the foreseeable future, making the
prospect of domestic production all the more elusive. Despite a heavy
dependence on imports, Greece’s political leadership has made a
concerted effort to promote the idea of local gas reserves in recent
years, both as a way to reduce its reliance on foreign producers and
provide a new revenue stream.
The push has coincided with a regional effort to be a part of an
offshore natural gas rush, led by Israel and Cyprus, and followed by
Turkey, Lebanon and Egypt. However, the push has been less than successful in enticing the
necessary foreign partnerships and financial support thanks to the
country’s recent struggles. A default will do little to change the
situation and will likely prolong the country’s financial isolation.
Further, this weakened financial position – or uncertainty about
investing in the country – could make it difficult to attract
partnerships related to possible transport projects from regional
producers like Azerbaijan and Cyprus.
http://www.forbes.com/sites/christophercoats/2015/06/30/greek-crisis-impact-felt-across-energy-sector/?ss=energy